S&P cuts Trailer Bridge outlook to negative

Standard & Poor's said it revised its outlook on Trailer Bridge Inc. to negative from stable and affirmed its long-term corporate credit rating at B- and its senior secured debt rating at B- with a recovery rating of 3.

The agency said the outlook change reflects its expectations that earnings will remain under pressure because of rising marine diesel fuel prices, continued softness in Puerto Rico and weaker-than-expected operating performance in the recently launched Dominican Republic service.

The B- ratings reflect Trailer Bridge's highly leveraged financial profile, concentrated end-market demand and participation in the capital-intensive and competitive shipping industry, S&P said.

Positive credit factors include a steady demand for ocean cargo shipments of food and other staples by residents of Puerto Rico and barriers to entry provided by the Jones Act, the agency added.

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